Don’t expect extravagant budget
– PPP will not be invited for talks -Finance Minister By: Kiana Wilburg For years, the past administration neglected frameworks for discussions over the national budget with the then opposition, APNU+AFC, and in a twist of fate, it appears that for the 2015 budget, the People’s Progressive Party/Civic will not have a single say. This is according to Finance Minister, Winston Jordan who expressed that while this may not be his intention, he is pressed for time to prepare and lay the budget in the National Assembly by August month end. In an interview with this newspaper on Saturday, Jordan confirmed that he has not contacted any member of the opposition party for talks on the budget and it is not likely that he will. “I have been meeting with several persons and several bodies on the budget. The time for laying the budget as stipulated by the Constitution is already short. And if a hand is to be extended to the PPP and it is dragged out, then I would be under fire and I have to be cognizant of what the constitution requires of me,” the Economist added. As for preparations on the 2015 budget, the Finance Minister revealed that inflation “remains in check.” The 2014 Mid-Year report produced by the Ministry of Finance indicated that over the first six months of 2014, growth continued to be positive and inflation remained low.
Finance Minister, Winston Jordan
The same was reflected in the 2013 mid-year report which said that inflation was contained by the end of June and the index had moved by only 0.2 percent relative to December, 2012. Jordan noted that internal revenue collections are on target but preferred not to divulge too many details in this regard. Given the worrying performance of the country’s traditional revenue earners, such as sugar and gold, the Finance Minister said that the budget cannot be expected to be anything close to the $220B one which was presented to the House in 2014 by Former Finance Minister, Dr. Ashni Singh. Jordan said that such an extravagant budget is also not possible given that the nation is already in the seventh month of the fiscal year. He emphasized that a “modest” budget is in the making. The Minister of Finance is also expected to submit a draft budget to Cabinet by Friday. He has already met with the Private Sector Commission (PSC) to note proposals which the entity hopes will be considered for the budget. The discussions between the two focused on a number of areas, such as the urgent need for liberalization of the Telecommunications Sector. This newspaper was able to get some insight into the discussions between the Finance Ministry and the Private Sector Commission with regard to the impending budget. In the area of infrastructure, attention was paid to dredging of the Demerara Harbour and the development of road links including the Timehri to Georgetown to East Demerara link, the Linden to Lethem Road and the East Bank Essequibo to Bartica Road. The Finance Minister suggested that a team be put together through the Ministry of Business to look at a Public-Private Partnership for the dredging of the Harbour. The PSC had also expressed its views on the need for renewable energy, especially hydro-electric and solar power projects, but Jordan made it clear that Government does not intend to proceed with the Amaila Falls project in its current form. The PSC nevertheless urged for the consideration of other renewable energy sources. With regard to the solid waste dilemma, including problems with the Haags Bosch landfill project, the Commission recommended the consideration of waste to energy systems since Guyana now generates enough solid waste to make these feasible. It had also recommended the establishment of a solid waste management authority. The Finance Minister then suggested that private capital be mobilized for recycling facilities. Also coming into focus was reform of the taxation system. The Minister informed the PSC that the Government is about to commission a tax study which would be utilized, along with a study conducted by Duke University, to develop a comprehensive taxation system for the country. The Commission then urged the Minister to consider a reduction in the rate of corporate taxation since this could increase government revenues. Jordan had shared with the Commission his Government’s intention to examine the Value Added Tax rate with a view to its amendment. He also shared the Commission’s view that property taxes need to be revisited. The Minister of Finance assured the PSC that its proposals would be given consideration in the formulation of either the 2015 or 2016 budget. He said that Government’s current priority is the implementation of its 100 day plan with an attendant focus on increasing pensions and salaries. Additionally, there have also been complaints of there being a lag in the commercial turnover for businesses. But the Granger Administration has a number of plans under review to boost the economy. These will be incorporated in the 2015 budget. In this regard, the Commission had urged Jordan to consider a stimulus to boost the economy and the Minister gave his commitment to consider this proposal. He also committed to ensuring stability of the currency through appropriate monetary policies.